Updated October 17, 2026. Quick answer: Box 4 of Form 1098-T shows an adjustment the school made this year for tuition and related expenses that were reported on an earlier year’s form. It concerns anyone who claimed an education credit for that earlier year. The student copy says it may reduce the credit you claimed, and Publication 970 explains the recapture steps that follow.
Line-by-line IRS form guides for 2025: Form 8863 line 31.
What box 4 reports
The student copy of the form gives the definition: “Shows any adjustment made by an eligible educational institution for a prior year for qualified tuition and related expenses that were reported on a prior year Form 1098-T.”
So box 4 is a look backward. Where Form 1098-T box 1 is about this year’s payments, box 4 corrects what the school reported for an earlier year. The rest of the form is covered in the Form 1098-T and 1098-E boxes guide, and the general page for the statement is Form 1098-T.
What kinds of adjustment the school reports here
The filer instructions name two ways an adjustment can arise. The table below sets them out.
| Kind of adjustment | What the instructions say |
|---|---|
| Payments received | “Enter reimbursements or refunds of qualified tuition and related expenses made in 2025 that relate to payments received that were reported for any prior year after 2002.” |
| Amounts billed | “Enter any reductions in charges made for qualified tuition and related expenses made during the calendar year that relate to amounts billed that were reported for any prior year after 2002.” |
| Nonresident alien students | “These requirements also apply to an adjustment made in connection with a nonresident alien for which the educational institution filed and furnished a Form 1098-T for the prior year.” |
The words “after 2002” set the reach of the rule: the school reports adjustments relating to years after that one. Because the instructions speak of both reimbursements or refunds and reductions in charges, the cause on your account might be a refund check, or a bill that was lowered after the fact. Your school’s account statement is the place to find out which.
What the adjustment can do to a credit you already claimed
The student copy continues: “This amount may reduce any allowable education credit that you claimed for the prior year (may result in an increase in tax liability for the year of the refund).”
The form then points to the publication: “to report a reduction in your education credit or tuition and fees deduction”. The publication’s glossary defines the key term: “To include as tax on your current year’s return an amount allowed as a credit in a prior year.” That is the meaning of the word recapture, and it is why a box 4 amount can change what you owe in the year you received the form, not in the earlier year.
How Publication 970 handles a refund after you filed
The publication separates two timing cases. When a refund arrives before you file, “the amount of qualified education expenses for 2025 is reduced by the amount of the refund”. When it arrives afterward, the rule is different: “If anyone receives a refund after 2025 of qualified education expenses paid on behalf of a student in 2025 and the refund is paid after you file an income tax return for 2025, you may need to repay some or all of the credit.”
The steps are set out in the section on credit recapture: “you must recapture (repay) any excess credit.” “You then refigure your education credit(s) for 2025 and figure the amount by which your 2025 tax liability would have increased if you claimed the refigured credit(s).” “Include that amount as an additional tax for the year the refund or tax-free assistance was received.”
The publication’s own example
Publication 970 works through a case in numbers. “You paid $7,000 tuition and fees in August 2025, and your child began college in September 2025.” “You filed your 2025 tax return on February 17, 2026, and claimed an American opportunity credit of $2,500.” “After you filed your return, you received a refund of $4,000.”
“You must refigure your 2025 American opportunity credit using $3,000 of qualified education expenses instead of $7,000.” “The refigured credit is $2,250.” “The increase to your tax liability is $250.” “Include the difference of $250 as additional tax on your 2026 tax return.” “See the instructions for your 2026 income tax return to determine where to include this tax.”
That example comes from the publication, not from this page, and it uses that publication’s own facts. Your credit, your refund and your year will differ, so use it to see the shape of the calculation. For how the credits themselves work, see education credits.
What to do when box 4 has an amount
The student copy also says where not to take questions: “do not contact the filer or the service provider for explanations of the requirements for (and how to figure) any education credit that you may claim.”
A related box, box 6, covers a different kind of prior-year change. The form says it “Shows adjustments to scholarships or grants for a prior year.” That one is discussed with the scholarship box in Form 1098-T box 5.
Edition and box numbers
The primary read for this page is the 2025 edition of Form 1098-T with its student instructions, the 2025 Instructions for Forms 1098-E and 1098-T, and Publication 970 for 2025 returns. The 2026 edition was the one irs.gov served as current on 2026-10-17. The 2026 student copy’s box 4 text reads the same as the 2025 text, word for word. The 2026 filer instructions differ slightly: they read “Enter reimbursements or refunds of qualified tuition and related expenses made in 2026 that relate to payments received that were reported for any prior year after 2002.” and “Enter any reductions in charges for qualified tuition and related expenses made during the calendar year that relate to amounts billed that were reported for any prior year after 2002.” The 2025 wording has one more word, made, after the phrase reductions in charges. Check the tax year printed on the form you received before relying on any box description here, because the instructions are reprinted every year.
Common mistakes
- Ignoring a box 4 amount because the tuition was paid in an earlier year. The form says the amount “may reduce any allowable education credit that you claimed for the prior year”.
- Reducing only the prior year’s return when the refund came after you filed. The publication says to “Include that amount as an additional tax for the year the refund or tax-free assistance was received.”
- Asking the school how to figure the credit change. The form says “do not contact the filer or the service provider for explanations of the requirements for (and how to figure) any education credit that you may claim.”
Related: Form 1098-T, education credits, Form 1040, and 2025 tax brackets.
Sources
- Form 1098-T (2025) with Instructions for Student: IRS archived PDF (irs.gov)
- Instructions for Forms 1098-E and 1098-T (2025): IRS archived PDF (irs.gov)
- Instructions for Forms 1098-E and 1098-T (2026): https://www.irs.gov/pub/irs-pdf/i1098et.pdf
- Publication 970, Tax Benefits for Education (for 2025 returns): https://www.irs.gov/pub/irs-pdf/p970.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.